Posts tagged: Thomas H. Lee Partners
The U.S. Treasury has approved agreements that will inject almost $280 million in private equity investment into Sterling Financial Corp.
Warburg Pincus Private Equity X, L.P. and Thomas H. Lee Partners L.P. will each invest $139 million in Sterling, which has undertaken a $720 million recapitalization effort to meet regulator requirements.
The Treasury Department committed $303 million in Sterling under the Troubled Asset Relief Program, but has agreed to mark that investment down to $75.8 million, plus warrants to purchase stock in the future, to assist in the recapitalization.
Sterling is the Spokane-based holding company for Sterling Savings Bank and Golf Savings Bank.
A Wall Street private equity firm has agreed to invest $139 million in Sterling Financial Corp. as the Spokane bank holding company continues its recapitalization effort.
Warburg Pincus Private Equity X, L.P. would own 20.5 percent of Sterling if the company successfully completes its $720 million plan to raise enough capital to satisfy regulator requirements.
Warburg Pincus would own Sterling common and preferred stock.
Thomas H. Lee Partners, which had earlier announced a $170 million investment in Sterling, would roll that amount back to the equivalent of the Warburg Pincus investment.
Both investments, and participation by the U.S. Treasury, are subject to completion of the recapitalization plan, regulatory approvals, stabilization of Sterling assets and capital levels, and other conditions.
Sterling Financial Corp. today announced new investments that could fulfill the Spokane institution’s need for additional capital.
Thomas H. Lee Partners, which last week committed $134 million to the recapitalization effort, will increase its investment to $170 million.
Sterling said it will also offer, in a private placement, $555 million in common and convertible preferred shares to accredited private investors.
If that offering is successful – a spokeswoman said she could not comment on whether there were buyers for the new stock – the combined investment of $725 million would bring Sterling and its principal subsidiary, Sterling Savings Bank, into compliance with regulatory capital requirements.
The U.S. Treasury will accept a steep markdown of its investment in Sterling Financial Corp. as part of a recapitalization plan, the Spokane company announced today.
The markdown was a condition imposed by Thomas H. Lee Partners, which has committed $134.7 million to Sterling’s recapitalization.
Treasury in November 2008 invested $303 million from the Troubled Asset Relief Program in Sterling.
According to the terms of the agreement with Sterling and Lee, Treasury will get $75.8 million worth of common shares as payback, plus 6.4 million warrants to purchase shares at 20 cents apiece.
The warrants will be good for 10 years.
Sterling must raise a total $720 million in new capital to offset losses on its real estate and construction loans.